Loss of Use Exposure under CGL Form?

Q

There is a gray area in terms of property in the care, custody, or control of a commercial general liability insured that we have not seen addressed. Namely, property damage liability for such property is excluded, but what about liability for loss of use? Suppose I have a piece of your equipment in my shop for repair and I break it. Instead of being interrupted for a day, as you had planned, your processes are now going down for a week while a new piece is located and brought into your operation. Will my CGL policy cover me for this loss of use exposure?

New Hampshire Subscriber

A

No, it will not. “Property damage” is a defined term. It means physical injury to property and resulting loss of use of the injured property. Thus, when an exclusion rules out coverage for “property damage,” the exclusion applies to loss of use as surely as it applies to physical injury.

This premium content is locked for FC&S Coverage Interpretation Subscribers

Enjoy unlimited access to the trusted solution for successful interpretation and analyses of complex insurance policies.

  • Quality content from industry experts with over 60 years insurance experience, combined
  • Customizable alerts of changes in relevant policies and trends
  • Search and navigate Q&As to find answers to your specific questions
  • Filter by article, discussion, analysis and more to find the exact information you’re looking for
  • Continually updated to bring you the latest reports, trending topics, and coverage analysis